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Financial Accounting

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Internal Control Report to Shareholders

FINACT-YPFCC7

Section 404(b) of the Sarbanes-Oxley Act of 2002 (aka SOX) requires auditors of publicly traded companies to report on the internal controls of a company in its annual report to shareholdeers.

Which of the following are major components of this reporting requirement (choose TWO items from the following list)?

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1. Statement that controls are in place and adequate for every aspect of the company's operations (e.g., production, financial reporting, HR, marketing, etc.) 2. Statement that company management has a responsibility to establish and maintain internal controls over its financial reporting system. 3. An overall risk assessment of the company including the financial impact of any risks deemed to be significant. 4. The auditor's own assessment of the effectiveness of the company's internal control system. 5. Statement verifying that the company has devoted sufficient resources to internal auditors to allow them to do their job effectively.